The Competition Tribunal has approved, with conditions, the merger wherein Super Group Holdings (Pty) Ltd ("SGH"), controlled by JSE-listed company Super Group Limited (“Super Group”), intends to acquire RSC Consulting Services (Pty) Ltd ("RSC") and Clean Tech 360 (Pty) Ltd ("Clean Tech").
Super Group provides supply chain management services, operates vehicle dealerships and provides fleet leasing and management services. RSC’s services include audit and verification of stock, integrity and accuracy audits as well as inbound and outbound distribution. Clean Tech provides commercial and hospitality cleaning and employee management.
In line with the conditions imposed on the merger by the Tribunal, SGH will announce its new employee share ownership plan (“ESOP”) in March 2023, through which qualifying workers from the stock taking and cleaning target-companies will benefit from shareholding in SGH, thereby promoting Broad-Based Black Economic Empowerment (“B-BBEE”).
The Tribunal’s order and reasons for its conditional merger approval are publicly available on
https://www.comptrib.co.za/case-detail/20192.
The Tribunal found that the proposed transaction will not lead to any substantial prevention or lessening of competition in any relevant market in South Africa. In addition, one of the public interest considerations of the Competition Act, No. 89 of 1998 is to promote “
a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons and workers in firms in the market”; as such, the Tribunal imposed public interest conditions, agreed to between the merging parties and the Competition Commission, in relation to the greater spread of ownership given that neither RSC nor Clean Tech has any Black ownership.
The ESOP
The Tribunal ratified the imposition of an ESOP and, during its consideration of the merger, interrogated how the ESOP will work. Engaging its inquisitorial powers, the Tribunal sought motivation from the merging parties on the quantification of the shareholding in the ESOP and the qualifying criteria for employees.
Ultimately, the ESOP will be implemented through an employee trust which will acquire a specified shareholding in SGH on behalf of qualifying employees who must be incorporated into the ESOP within a specified period. Qualifying employees must be Black employees as defined by the B-BBEE Act, No. 53 of 2003. In addition, the ESOP must be held at no cost to its beneficiaries and dividends will be paid to the trust and distributed to beneficiaries annually.
